The activist investor reported a stake in the speech-recognition software maker in April. Late Thursday Mr. Icahn went from being a passive holder to an active investor, signaling he may seek board seats. He wasn’t immediately available for comment Friday.

That has the stock up 4.6% to $19.15 on Friday, reversing four straight days of declines.

Mr. Icahn is the biggest shareholder in Nuance, holding 16.9% stake. The company adopted a poison pill earlier this month with a 20% threshold and the WSJ reported that it hired Goldman Sachs.

“We welcome communications with stockholders and value input toward the goal of enhancing stockholder value,” the company said in a statement Friday. “The Nuance Board of Directors and management team are committed to enhancing value for all stockholders, and we will continue to take the actions that we believe will enable us to achieve this objective.”

Nuance shares are down 15% this year as investors have questioned its results. Earlier this month, Nuance posted a third-quarter loss and projected results for the current quarter and full-year that fell below Wall Street’s estimates. In the second quarter Nuance missed estimates and announced a $500 million share buyback.

The company says it is positioning itself for more recurring revenue, which it believes will stabilize results. It also says it is investing to transition from voice-recognition to what it calls “natural-language processing,” which allows a user to speak more freely.

“We are embracing this transition despite its effect on near-term revenues due to the increased recurring nature, predictability and longevity of these revenue streams,” Chairman and CEO Paul Ricci said on the third-quarter call.

Mr. Ricci said some contracts weren’t signed because Nuance pushed for higher prices. But compounding issues, in long-term contracts, Nuance takes an expense up front and only sees the revenue over the length of the contract. The company’s operating margins slumped to 28.1% in the third quarter from 36.1% a year earlier.

Nuance makes voice-recognition software and dictation systems. Its largest unit is healthcare, which made up 39% of 2012 revenues, and is aimed at the drive to digitize patient records. The company’s second-biggest segment, mobile, focuses on phones, cars and other devices, including Apple Inc.’s Siri.

Nuance’s technology is under the Dragon brand. Dragon was as a pioneer of speech-recognition software that became embroiled in a messy lawsuit over its sale, led by Goldman Sachs. The company that bought Dragon collapsed as a fraudshortly after the deal and Nuance wound up with key portions out of bankruptcy. Goldman was cleared of wrongdoing in January.

FBR analysts said Mr. Icahn’s stake essentially had set a floor for the company’s shares, while Nuance posted “disappointing” results in healthcare and mobile.

Now that Mr. Icahn appears ready to take matters into his own hands, shareholders should expect bigger changes, the FBR analysts says. It is the Mr. Icahn’s fourth new target this year and he has filed or updated activist filings on 12 companies this year, according to FactSet SharkWatch.

FBR says Nuance is fixable, but that they expect the activist to target management as well as possibly splitting up the businesses, such as shedding an enterprise unit and an imaging unit. A deal to sell the whole company could also be in play.

“While an ultimate sale of Nuance to a larger technology player is a possibility, we believe potential management changes and strategic changes in the company’s business are the near-term focus for enhancing shareholder value for Nuance,” FBR wrote. “Nuance is not a ‘broken company’ in our opinion and Icahn could be the missing piece in helping get this company back to the growth story it used to be by having the right strategy and execution in place.”

UPDATE: This post has been updated with a company statement and to note Nuance provides technology for Apple’s Siri.